ICD-10 Transition in an Integrated Care Medical Billing System
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1 5010 and D.0 Transition in an Integrated Care Delivery System The Kaiser Permanente Experience A Presentation to AHIP HIPAA Transaction Standards and ICD-10 Implementation Task Force by Greg Reburn, MBA Director Revenue Cycle Production Support March 16, 2010
2 Kaiser Permanente Physician Hospital Largest not-for-profit, integrated delivery system 8.6 million members 38 billion dollars in annual revenue 170 plus thousand employees and physicians 8 regions Ancillary Pharmacy Insurance 2
3 Kaiser Permanente 5010: A Distinct Yet Interdependent Approach Distinct but interdependent entities form the Kaiser system within each of Kaiser s eight (8) regions: Kaiser Foundation Health Plan Thus distinct but highly interdependent teams were formed to implement 5010 across our regions: 5010 Health Plan Team Kaiser Foundation Hospitals Permanente Medical Groups 5010 Revenue Cycle Team 5010 Pharmacy Team Hawaii Southern Northern Colorado Northwest Ohio Georgia Mid-Atlantic California California Kaiser Foundation Health Plans work with employers, employees, and individual members to offer prepaid health plans and insurance. The health plans are not-for-profit and provide infrastructure for and invest in Kaiser Foundation Hospitals. Kaiser Foundation Hospitals operates medical centers in California, Oregon and Hawaii, and outpatient facilities in the remaining Kaiser Permanente regions. The hospital foundations are not-for-profit and rely on the Kaiser Foundation Health Plans for funding. They also provide infrastructure and facilities that benefit the for-profit medical groups.. Permanente Medical Groups are physician-owned organizations, which provide and arrange for medical care for Kaiser Foundation Health Plan members in each respective region. The medical groups are for-profit partnerships or professional corporations and receive nearly all of their funding from Kaiser Foundation Health Plans. 3
4 5010 Approach: Shared Themes and Coordinated Activities Northern California Hawaii 5010 Health Plan Team Northwest Georgia Mid-Atlantic Revenue Cycle Team Theme Level One Compliance Internal Readiness Southern California 5010 Pharmacy Team Colorado Ohio Theme Level Two Compliance External Partner Readiness Go Live Go Live Activities I. Analysis & Impact Assessment Complete Vendor Assessments Perform national and regional system gap analysis for impacted transactions II. Design / Build / / Develop / Test Prioritize requirements and determine 5010 designs Complete Systems Test Planning III. Partner Readiness Identify Trading Partners and engage them in the planning process IV. External Testing Coordinate and manage testing with trading partners V. Go Live Activities Provide training support for business and technical staff on changes in 5010 and D.0 Identify Business and Functional Requirements 4
5 Why do 5010 other than for Compliance? Improve EDI connectivity - Takes advantage of many requests for changes to the transactions. Necessary for ICD-10. Reduces / eliminates some of the need for companion guides between trading partners. Ex. 837 Patient/Subscriber restructuring subscriber information only required in 5010 if the patient can t be uniquely identified. Ex. 837 now has clear definitions of who can be a billing provider. Improves situational rules and provides increased field lengths to capture full data. Ex. Required when insert rule here, if not required by this implementation guide, do not send. Ex. Increase in patient, subscriber, and provider name fields. Provide greater efficiency and overall usability. Improving claims receipt, control, and balancing procedures. Increasing consistency of claims editing and error handling - Provides common edit definitions to be used by all systems and jurisdictions. Returning claims needing correction earlier in the process - Adds edits for common mistakes to the front end MAC systems, rather than waiting to do these edits in the adjudication systems. Assigning claim numbers closer to the time of receipt - The front end systems will assign the base claim number (in the format expected by the adjudication system), and have the adjudication system add any suffix necessary for split or adjustment claims. 5
6 5010 Kaiser Project Guidelines Partner with all regions for Health Plan, Provider, and Pharmacy IT systems. Give high implementation priority to the 5010 changes that are required for support of ICD-10. Leverage appropriate vendor tools, industry best practices and outside resources to reduce implementation risks and costs. Do not remediate systems that will be replaced unless it is critical from the compliance or operational perspective. Business partners will prioritize business and functional requirements to be implemented. Leverage forums such as business Communities of Practice to prioritize requirements and get sign-off. 6
7 Scope Initial Findings Provider Outbound 837 I&P Health care claims Inbound 835 Health care payment and remittance advice 276/277 Health care claim status/response 270/271 Eligibility request/response Health Plan 278 Notification Referral certification and authorization notification Inbound 837 I&P Health care claims Outbound 835 Health care payment and remittance advice Pharmacy D.0 B1 - Claim request/response B2 - Claim reversal E1 - Eligibility N1 - Informational N2 - Informational reversal 1.2 Batch standard 7 17% 2% Systems Impacted by Business Area 17% 25% Self Funding 22% 17% Pharmacy Claims Membership Care Delivery & Revenue Cycle Medicare ** This does not include downstream systems and databases that maybe impacted due to data related changes such as new data elements and field length changes. This analysis is still to be done.
8 Scope for External Testing Huge Third Party Administrators HRA Administrator External Provider Clearinghouses 277 U NCPDP Pharmacy Benefit Manager (PBM) Providers Re -pricer / Fee Verifier Payment Solution Providers 837 I & P I & P I & P 837 I & P External testing 12/31/11 deadline to be able to send and receive EDI transactions with external trading partners. Expecting external testing to require extensive coordination with each trading partner. Planning on trading partners to be on a different timeline throughout the year, requiring flexibility in the testing plan. NCPDP PDE 835 NCPDP NCPDP NCPDP NCPDP 837 I & P Enterprise Pharmacy Information Management Systems (epims) Home Infusion State Agencies Employer Groups / Employer Group Benefit Administrators 820 Delta Dental Part D EOB Part D Bill Refund Utilization MSP - CMS Eligibility Verification Members 8
9 Some Early Lessons Learned It is never too soon: Start early. Work closely with your system/software vendors to ensure timely delivery of 5010/D.0 ready capability and application support. Help them with understanding 5010/D.0 impacts if needed. Divide and Conquer: Identify reasonable lines of responsibility (i.e. workstreams, tracks, project teams) and work towards common themes and milestones. Look upstream and downstream; identify key interdependencies amongst systems and business workflows. Fixed changes include the data content changes in the standards - use them to identify the minimum impact to applications. Clearly define Level 1 and Level 2 Compliance in your organization. Communicate, Communicate, Communicate! 5010 impact and design analysis requires extensive review of field level requirements to identify the impact to your application software feels very much Y2K-like and NPI-like - Expect the impact of 5010 and the work effort to design, build and test, to be larger than you might expect. 9 9
10 Questions? 10
11 ICD-10 Transition in an Integrated Care Delivery System: The Kaiser Permanente Experience Harald Herrmann, MBA, CSSBB, PMP, SCPM Executive Director KP HP ICD-10 Transition Lead, Health Plan Capability Development Program Management & Capability Development Kaiser Foundation Health Plan, Inc. Kaiser Foundation Hospitals March, 2010
12 Kaiser Permanente Physician Hospital Largest not-for-profit, integrated delivery system 8.6 million members 38 billion dollars in annual revenue 170 plus thousand employees and physicians 8 regions Ancillary Pharmacy Insurance Page 2
13 Table of Contents Progress to date IT impact assessment Vendor assessment Ongoing Health Plan (HP) Business and people impact assessment KP ICD-10 program organization HP multi year timeline Challenges and opportunities Page 3
14 KP IT Impact Assessment KP conducted an IT and vendor impact assessment in Review of our system inventory (2000 plus IT applications across Clinical, Revenue Cycle and Health Plan) identifying those impacted by ICD-10 and includes information on: The degree of impact for each system. Existing plans for replacement or retirement as part of our overall IT strategy. For vendor-supplied/supported systems, the vendors plans and timing for complying with ICD-10. High-level recommendation regarding go-forward plans to transition to ICD-10, including transition cost estimates and strategy options. Page 4
15 ICD-10 IT Impact Assessment Initially we identified applications that use ICD-9 and followed up with a second data query that focused on applications that do not have retirement plans, are not vendor supported, and use ICD-9 data. The framework below outlines the question tree logic that KP deployed to understand the impact and inform the ICD-10 transition plan strategy. Does App contain ICD-9 data? No Complete Yes Determine how integral ICD-9 data is to system / application sample questions: 1. Used in business rule/application logic? 2. Used as part of the adjudication and reimbursement process? Map to role Primary Role Secondary Role Notion of History/ Reporting Recommend transition strategy Replace Remediate 3. Part of configuration data? Carried Along Consolidate Page 5
16 ICD-10 Vendor Assessment KP deployed a vendor survey and assessment framework to understand their state of readiness thru the transition period to ensure compliance by October 2013 and proper integration with KP applications. The assessment framework included the following dimensions: Vendor readiness to implement their product/solution for ICD-10 compliance Vendor risk profile based on existing contracts Vendor s strategic importance to Kaiser Overall vendor rating based on readiness, importance and contract risk Ongoing effort to detail KP ICD-10 vendor management approach and vendor specific action plans based on overall rating and insights thru survey process. Page 6
17 ICD-10 HP Business and People Impact Assessment The ICD-10 HP Business and People Impact Assessment consists of three components: Business and people impact assessment survey, business cost estimation and mapping of HP employees to training need categories based on degree of impact and training requirements. Ongoing effort across national and regional HP functions with the objective to: Understand and document impact by HP function and cross organizational dependencies Determine and quantify the impact on KP business processes/workflows, policies, procedures and documentation to understand the scope of change and preparation required (includes budget, resources and timeline) to move to new coding standard. Determine the impact on our people and derive need for change management and education / training requirements. Identify high level business requirements for achieving ICD-10 compliance. Identify additional business owned applications that are not captured in central application inventory management system but might also be impacted by ICD-10. Page 7
18 Current KP ICD-10 Program Organization Executive Sponsors Steering Group Regional BIOs (Business Information Officers) Health Plan Lead Revenue Cycle / Clinical Operations Lead Status reporting PMO Issue tracking Integrated plan Document repository Escalation management Workstreams Etc IT Business & People Impact Assessment Organizational Readiness Compliance & Controls KPIC Vendor Management Concept Definition Development Deployment Software vendor readiness Change Management Communications Training Union engagement KPIC processes, systems KPIC vendor readiness Reg l IT Reg l Bus Reg l Bus Reg l Comms Reg l Training Reg l Compliance Engagement thru Reg l Engagement Leads Reg l Leads Page 8
19 KP Multi-year High Level Timeline The adoption of the ICD-10 standard will impact people, processes and technology across Kaiser Permanente and will require significant coordination across IT and Business Org Readiness Build Awareness Communicate Internal/External Prep Activities (High-Level) Focused Communications Assessment Awareness, change readiness/preparation, training and union engagement Develop Resource Library Next level of detail Change Management Prep (incl Training Plan) Training Business Business Impact Assessment may identify additional impacted businesssupported apps Deep Dives Revise Policies/Processes Implementation Planning Prep & Cutover IT Concept Definition Development & Testing Deployment Crosswalk/ Mapping Strategy End-to-End Testing Strategy Business input required Monitor Vendor Readiness Manage Vendor Compliance Mitigate Risks, Develop Contingency Plans (if req d) Page 9
20 ICD-10 KP Opportunities and Challenges ICD-10 is a multi year effort ICD-10 is competing against other high priority initiatives and 2013 is a couple of years out Cross regional / organization coordination (HP, Clinical, and Revenue Cycle) and importance of the PMO to help coordinate across stakeholder groups Compliance vs. compliance plus Use ICD-10 as a means to drive improvement Opportunity to revisit our existing IT strategy and reconsider system remediation vs. replacement approaches Page 10
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